Question 1

If Cash at December 31,2018,is $66,000,total assets amounts to:

Accepted Answer

A) $606,000. 
B) $806,000. 
C) $662,000. 
D) $646,000.

Question 2

The balance sheet item that represents the portion of owners' equity resulting from profitable operations of the business is:

Accepted Answer

A) Accounts receivable. 
B) Cash. 
C) Capital stock. 
D) Retained earnings.

Question 3

The change in owners' equity due to only revenue and expense transactions is explained by the:

Accepted Answer

A) Statement of cash flows. 
B) Statement of financial position. 
C) Income statement. 
D) Tax return.

Question 4

The accounting equation may be stated as "assets minus liabilities equals owners' equity."

Accepted Answer

A) True 
 B)False

Question 5

If a transaction causes an asset account to decrease,which of the following related effects may occur?

Accepted Answer

A) An increase of equal amount in an owners' equity account. 
B) An increase in a liability account. 
C) An increase of equal amount in another asset account. 
D) An increase in the combined total of liabilities and owners' equity.

Question 6

Valuation of assets under generally accepted accounting principles
Under generally accepted accounting principles,the assets owned by a business are reported in the balance sheet at their historical cost.Identify and briefly explain two accounting principles other than the cost principle that support the valuation of assets at cost in the balance sheet.

Accepted Answer

The answer of Valuation of assets under generally accepted accounting...

Question 7

A business entity is regarded as separate from the personal activities of its owners whether it is a sole proprietorship,a partnership,or a corporation.

Accepted Answer

A) True 
 B)False

Question 8

The sale of additional shares of capital stock will cause retained earnings to increase.

Accepted Answer

A) True 
 B)False

Question 9

[The following information applies to the questions displayed below.]
During the month of August,Boyce Company had the following transactions:
(1)Revenues of $120,000 were earned and received in cash.
(2)Bank loans of $18,000 were paid off.
(3)Equipment of $40,000 was purchased with cash.
(4)Expenses of $73,600 were paid.
(5)Stockholders purchased additional shares for $44,000 cash.
-A statement of cash flows for August would report net cash flows from financing activities of:

Accepted Answer

A) $40,000. 
B) $26,000. 
C) $46,400. 
D) $32,400.

Question 10

Any business event that might affect the future profitability of a business should be reported in its balance sheet.

Accepted Answer

A) True 
 B)False

Question 11

If Cash at December 31,2018,is $86,000,Capital Stock is:

Accepted Answer

A) $260,000. 
B) $300,000. 
C) $620,000. 
D) $168,000.

Question 12

Owners' equity in a business increases as a result of which of the following?

Accepted Answer

A) Payments of cash to the owners. 
B) Losses from unprofitable operation of the business. 
C) Earnings from profitable operation of the business. 
D) Borrowing from a commercial bank.

Question 13

The practice of showing assets on the balance sheet at their cost,rather than at their current market value is explained,in part,by the fact that cost is supported by objective evidence that can be verified by independent experts.

Accepted Answer

A) True 
 B)False

Question 14

The major outgrowth from business failures and allegations of fraudulent financial reporting during the 1990s was the passage of the Securities and Exchange Act.

Accepted Answer

A) True 
 B)False

Question 15

If during the current year,liabilities of Hayden Travel decreased by $50,000 and owners' equity increased by $75,000,then:

Accepted Answer

A) Assets at the end of the year total $125,000. 
B) Assets at the end of the year total $25,000. 
C) Assets increased during the year by $25,000. 
D) Assets decreased during the year by $125,000.

Question 16

Refer to the information above.If the Cash balance at December 31,2018 is $62,500 then Total Liabilities amounts to:

Accepted Answer

A) $ 42,500. 
B) $140,000. 
C) $ 45,000. 
D) $182,500.

Question 17

If the Cash balance at December 31,2018 is $67,500,the Notes Payable balance is:

Accepted Answer

A) $118,750. 
B) $ 47,500. 
C) $137,500. 
D) $140,000.

Question 18

Refer to the information above.For the month of October,net cash flows from operating activities for Waldorf were:

Accepted Answer

A) $ 18,500. 
B) $ 22,500. 
C) $ 78,000. 
D) $100,500.

Question 19

Assets need not always have physical characteristics as do buildings,machinery,or inventory.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is correct if a company purchases equipment for $70,000 cash?

Accepted Answer

A) Total assets will increase by $70,000. 
B) Total assets will decrease by $70,000. 
C) Total assets will remain the same. 
D) Total owners' equity will decrease.

Exam 2: Basic Financial Statements

If Cash at December 31,2018,is $66,000,total assets amounts to:

The balance sheet item that represents the portion of owners' equity resulting from profitable operations of the business is:

The change in owners' equity due to only revenue and expense transactions is explained by the:

The accounting equation may be stated as "assets minus liabilities equals owners' equity."

If a transaction causes an asset account to decrease,which of the following related effects may occur?

A business entity is regarded as separate from the personal activities of its owners whether it is a sole proprietorship,a partnership,or a corporation.

The sale of additional shares of capital stock will cause retained earnings to increase.

Any business event that might affect the future profitability of a business should be reported in its balance sheet.

If Cash at December 31,2018,is $86,000,Capital Stock is:

Owners' equity in a business increases as a result of which of the following?

The practice of showing assets on the balance sheet at their cost,rather than at their current market value is explained,in part,by the fact that cost is supported by objective evidence that can be verified by independent experts.

The major outgrowth from business failures and allegations of fraudulent financial reporting during the 1990s was the passage of the Securities and Exchange Act.

If during the current year,liabilities of Hayden Travel decreased by $50,000 and owners' equity increased by $75,000,then:

Refer to the information above.If the Cash balance at December 31,2018 is $62,500 then Total Liabilities amounts to:

If the Cash balance at December 31,2018 is $67,500,the Notes Payable balance is:

Refer to the information above.For the month of October,net cash flows from operating activities for Waldorf were:

Assets need not always have physical characteristics as do buildings,machinery,or inventory.

Which of the following is correct if a company purchases equipment for $70,000 cash?